The survey result may signal a turning point which could see firm level expectations sink into negative territory in coming quarters.

Burchell Wilson says:

“There is little evidence in this survey that provides comfort for the view that the anticipated recovery in non-mining investment will be sufficient to offset the drag on growth from the resources sector in the year ahead.

Businesses are judging that it is not a good time to expand capacity and expect there to be further pressure to reduce the size of their work forces.

Combined with the disappointing labour market figures for December, the case for a further interest rate cut is growing.”

Business is also concerned by the slowing of needed reforms which are being blocked by the Opposition and the existing Senate.

“The politically difficult structural reforms that will counter the headwinds the economy faces in coming years are likely to require both significant bipartisanship and a mature public policy debate. Signs that business could be let down on this front will continue to weigh on confidence.”

The survey of 613 businesses mainly from construction and manufacturing industries covered the three months to December 2013.